I had this really interesting chat with one on my tenants
the other day, on renewal of their tenancy agreement. They are a lovely couple
, early thirties and I know they have decent jobs in Grantham. They have been
tenants of ours for quite a while, so I know them quite well. We got talking and I enquired if they ever
thought of buying a property for themselves, to which they replied back with
the title of this article. It made me think and so I did some more research
into the subject wich I want to share with you.
After the end
of the Second World War, just over a quarter of the UK population owned their
own home, the rest rented from private landlords or the local Council. If
someone told you in the 1970’s and 1980’s that they rented, they were
considered a second class citizen. Everyone wanted to own their own home .. it
was the done thing. We think that home ownership will inevitably happen,
but it won't.
It all
changed in the 1970’s, when two things happened. Firstly, the number of people
who owned their own home broke through the 50% barrier in 1971 and by 1981 it
was at 57%. Tied in with that, the average house prices in Grantham were
doubling at one point every four years in the 1970’s so property and profit
started to feed off each other.
To put that growth in context, if we were to look at the
last 85 years in Grantham, in 1930, the average Grantham property was worth £313.
It took 16 years for Grantham property values to double, rising to £774 by
1946. Another 15 years and the average Grantham property doubled again to £1,469
in 1961. The next doubling only took 10 years, as by 1971 the average Grantham
property had reached £2,987 in value.
It was (as mentioned above) the 1970’s when things really
took off, as by 1975 (ie only four years) they had doubled to £6,252 and they
doubled again to £12,515 by 1980. It took another eight years for values to
double again, as an average Grantham property reached £26,177 in 1988. Twelve
years had to pass until the doubled again in 2000 (£53,800) and just six years
to double again by 2006, when they reached £108,629 Where are we today? The average property
value in Grantham currently stands at £148,400.
We could blame Maggie Thatcher for
making home ownership the ultimate goal, but what we now need to consider is
that the country is turning on its head and we need to, as a Country, love renting again. Some blame the
banks, but obtaining a 95% mortgage is hard work, but nowhere near impossible.
A typical Grantham first time buyer would only need to save £3,500 for a
deposit and fees and they could buy a very decent property. For example, you
could a property in Cherry
Orchard in Grantham, and it would be cheaper each month in mortgage
payments than renting.
People might say on the surveys they want to buy, when it
comes down to it. If you have been living in a top of the range large property in
Barrowby Gate , but the bank will only lend you enough to
buy a smaller property in Cherry
Orchard, what would you do? Don’t get me wrong, Cherry Orchard has really pulled its socks
up over the last ten years, but it isn’t Barrowby Gate, is it? Again, if you were a twenty
something, what would you do? Look again at the title of the post ... “The
way it works is, you have to rent where you want to live, or buy where you
don’t want to live,”
